|
PureBytes Links
Trading Reference Links
|
In an attempt to fit the market's activity into some kind of structure I
have turned to Dow Theory. I've read all the tenets but I am still
struggling to apply a methodical & objective approach. My aim is to be
able to look at a chart and say (according to defined rules) what the
next downside or upside barrier is using Dow Theory.
Unless my understanding is way off the mark (or unless what I'm really
looking at is Swing Trading?) I want to label a chart with highs, lows,
higher highs, higher lows, lower highs & lower lows.
This brings me to my first problem - what is a high (low)?
I've asked many people but not received a satisfactory answer. It seems
everyone knows what they consider a high or a low when they see it...but
they can't give a definition, and they look at me as if I'm nuts when I
ask the question.
For instance, I've seen it suggested that you can define highs & lows by
using a moving average and the highest price achieved whilst above the
MA is a local high and the lowest low reached whilst below the MA is a
local low. Comparisons of highs & lows can be made thereafter.
This seems to run into problems when there is a long consolidation. Also
after a steep rally it means that the last significant Dow support is
too far away to be of practical use and I was wondering if other RTers
had tried to find a methodical approach to defining highs & lows and
what conclusions had been reached.
Thanks in advance.
Tom Nagle.
______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com
|